Market Structures

Market Failures

Positive Externality: A benefit that falls on someone other than the producer or consumer.

Negative Externality: A cost that falls on someone that is not a producer or consumer.

Number of producers and consumers: Few producers. A small number of firms control the market.

Similarity of products: Similar products. Producers in oligopolies offer essentially the same product.

Ease of entry: High barriers to enter. It is very hard for new firms to get into oligopoly.

Control over prices: Some control over prices.

Number of producers and consumers: Many producers. Monopolistically competitive markets have many producers or sellers.

Similarity of products: Differentiated products. Firms in this type engage in product differentiation.

Ease of entry: Few barriers to enter. Start-up cots are relatively low in monopolistically competititve markets.

Control over prices: Some control over prices. Because producers control their brands, they also have some control over the prices.

Number of producers and consumers: One producer. No competition in monopoly.

Similarity of products: Unique product. There are no good substitutes.

Ease of entry: High barriers to enter. Limit producers from entering the market.

Control over prices: Substantial control over prices.

Number of producers and consumers: Many producers and consumers. The large amount of participants promote competition.

Identical products: Products are virtually identical.

Ease of entry: In perfect competition, producers face very few restrictions.

Control over prices: No control over prices.